Continued partnership and adaptability throughout the lubricant value chain are crucial to navigating an increasingly ambiguous and complex global environment. 

That was the main message of my keynote earlier this month at the 27th ICIS World Base Oils and Lubricants Conference in Windsor, United Kingdom.

Why? Because the world’s continued decarbonization push and shifting economic forces are creating new requirements for the specialty chemicals and lubricants industry. And while additives and lubricant businesses have certainly contributed to sustainability in many ways, industry stakeholders should expect new challenges and opportunities in the years ahead.

Look no further for the effects of the global decarbonization trend than the internal combustion engine (ICE) bans already in place or proposed in Europe, along with California and several other states in the United States. Corresponding to these moves, original equipment manufacturer exploration into new propulsion sources has accelerated in recent years.

Most visible of the bunch are electrified vehicles, which have grabbed headlines of late, especially post-pandemic. But several other technologies are also on the table, including hybrid-, CNG-, and hydrogen-powered transport. And that’s only on the road. Other industries, such as shipping, are also exploring future fuels to decarbonize (alternative fuels such as biofuels, methanol and ammonia).

The net-net for additives and lubricants businesses? Change. 

As an example, if the additives industry is to decarbonize, chemical raw materials will need to come from more than refineries as new technologies and suppliers come to fruition. Same with base oils. Subsequently, we can expect new players in the evolving lubricant value chain.

So, how should our industry approach the change?  

My answer: Together and with intention.

We’re navigating in an environment of ambiguity. Future mobility can take many paths. But the specialty chemicals and lubricants industry can’t effectively address ambiguity by predicting what might happen. Rather, we need to collectively set a vision and drive it. We need to lead. If we don’t, someone else will define the future for us.

Now, that collective vision won’t come together overnight. It will take time as there are many considerations for how we shape it.

A big one beyond climate change and decarbonization, of course, is how shifting economic forces figure to create more change over time.

Some questions to ponder:  

• How will the availability of raw materials needed to enable the green transition affect local supply chains?  
• How will population growth in the developing world affect supply and demand? 
• And, assuming we see more significant needs for diversification from region to region, how will businesses adapt?  

In appreciation of these points, we are committed to focusing on our customers’ unique geographical needs and demands as a driving force behind our business. By doing so, we’re enabled to respond swiftly and gain deeper insight into their preferences, ensuring we consistently meet and exceed their expectations.

To recap:

• Climate change and shifts in global economic power are significantly affecting our industry.
• There are many challenges and opportunities ahead.
• The road to continued decarbonization will require reducing ICE impact while supporting future mobility and other new technologies – we won’t solve everything overnight. 
• We will see greater diversification of regional needs.
• Continued partnership throughout the value chain is vital amid increasing complexity – we all have roles to play.
• To navigate ambiguity, we must drive together rather than react.

The strength of our industry and our ability to solve complex challenges comes from our working together.  We look forward to working with our partners as we navigate the new landscape.

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